Quick answer
Bank statement mortgages are usually priced higher than conventional loans because they are non-QM loans made without tax returns. Your credit score, loan-to-value, loan size, property type and reserves have the biggest effect on the rate. If your tax returns already show enough income, a conventional loan is usually cheaper, so it is worth pricing both. This page explains factors, not rate quotes; a written quote shows your actual terms.
Why bank statement loans cost more
Conventional loans follow standard agency guidelines and are easy for lenders to sell, which keeps their pricing low. A bank statement mortgage is a non-QM loan: it uses a different way to document income, and the lender or investor holds more of the risk. That shows up as a higher rate.
The gap is not fixed. It changes with the market and with your file, which is why two self-employed borrowers can be quoted very different rates on the same day.
What moves your rate
| Factor | Usually lowers your rate | Usually raises your rate |
|---|---|---|
| Credit score | Higher scores | Scores near our 640 minimum |
| Loan-to-value | More down or more equity | Borrowing near our 80% maximum |
| Loan size | Mid-range loan amounts | Very small or very large loans |
| Property type | Primary residence, single-family | Investment property, some condos or multi-unit |
| Reserves | Months of payments in savings after closing | Little left after closing |
General pricing factors, not a rate quote. Your terms depend on your full application.
When a conventional loan wins
If your last two tax returns show enough income to qualify, a conventional loan is usually the cheaper option, even if the paperwork takes longer. A bank statement loan earns its higher price when your write-offs or a recent jump in income mean your returns understate what you really earn.
Because I work as both a lender and a broker, I can price both paths side by side, so you are choosing based on numbers rather than guesswork.
Ways to improve your price
- Raise your score before applying. Paying down credit card balances is often the quickest lever.
- Put more down if you can. Moving further below the 80% maximum often improves pricing.
- Keep reserves after closing rather than putting every dollar into the down payment.
- Plan a refinance path. If your next tax returns will show higher income, a later conventional refinance may lower your rate.
See the full bank statement mortgage guide for requirements and how the process works.
FAQ
Are bank statement mortgage rates higher than conventional?
Usually, yes. They are non-QM loans made without tax returns, so they are typically priced above conventional loans. The gap depends on your credit score, loan-to-value, loan size, property type and reserves.
Can I refinance a bank statement loan into a conventional loan later?
Often, yes, if your tax returns later show enough income and you meet conventional guidelines. Check any prepayment terms on your loan first.
What is the minimum credit score for your bank statement mortgage?
Our program considers scores down to 640. Higher scores generally receive better pricing.
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Keep reading
Bank Statement Mortgage Guide
Requirements, costs and who the loan fits.
How Many Months of Bank Statements Do You Need?
What underwriters look for in your statements.
HELOC vs. Cash-Out Refinance
Keep your first mortgage or replace it?